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25 February 2011

Australian Consortium to Set up Heavy Industries in the Eastern Port of Trincomalee with $700mn Investment

24th February 2011, www.lankabusinessonline.com

Sri Lanka is considering a proposal by an Australian consortium to set up heavy industries in the eastern port of Trincomalee with an investment of 700 million US dollars, a government statement said.

The government is to set up a special zone for heavy industries in Trincomalee to provide access to a deep-water port for investors keen to enter the island after the end of its 30-year ethnic war, a spokesman said.

"There's so much of enthusiasm by businessmen and foreign investors, particularly in the region, to invest in the counter after 30 years of war," media minister Keheliya Rambukwella told a news conference.

"They found that this country that can be commercial hub. One of major components needed is access to a port and the government has decided to set up a zone particularly for heavy industries which need port access."

The statement said Mitchell Consortium, a multinational consortium from Australia with partners from Brazil and Sri Lanka, has made an unsolicited proposal for a zone with heavy industries.

These include a coking coal or metallurgical coal and an iron ore palletizing plant for steel making, and a sugar refinery.

The zone for heavy industries is to be set up on 97 square kilometres of land in the Sampur area of Trincomalee, near the entrance to the bay, part of which has already been earmarked for an Indo-Lanka joint venture coal power plant.

The statement said the Cabinet of ministers gave approval for the consortium to conduct feasibility studies for the project, the first phase of which will be 700 million dollars.

Rambukwella said environmental safeguards will be given high priority in the project.

Since the dawn of peace in 2009, Sri Lanka's investor-friendly economy has been growing at over 6% per year. The recently elected government is fully dedicated to good governance and transparency, and has already reconnected the country to the wider world and attendant opportunities.
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